Page 1 Recording of this session via any media type is strictly prohibited. Page 1 An Empirical Analysis of ERM and Reputation

Page 2 Recording of this session via any media type is strictly prohibited. Presenters Dr. Paul L. Walker St. John’s University Dr. David M. Pooser St. John’s University

Page 3 Recording of this session via any media type is strictly prohibited. RESEARCH QUESTIONS Does ERM influence the reputational value of the firm? Which financial factors impact a firm’s reputational value? How might our results affect future research in this area?

Page 4 Recording of this session via any media type is strictly prohibited. DATA PROCESS We received data from Steel City Re, RIMS (through LogicManager), and matched the data to annual financial data through Compustat The RIMS data contained survey responses to a risk management maturity (RMM) survey About 1974 initial observations Initial cleaning reduced the set to roughly 1550 observations Steel City Re’s match produced 339 firms with 389 observations We merged the Steel City Re reputational data, RIMS RMM data, and Compustat annual financial data to create a dataset with 252 firms

Page 5 Recording of this session via any media type is strictly prohibited. THE RVM VARIABLE IN OUR STUDY RVM 1% % % % % Mean0.6770

Page 6 Recording of this session via any media type is strictly prohibited. PLOTTING THE RVM AND ERM SCORE

Page 7 Recording of this session via any media type is strictly prohibited. SUMMARY STATISTICS HIGH VS. LOW RVM RVM Quartile 1RVM Quartile 4 ERM Score Opaque Assets16.76%14.13% Tobin's q * Firm Assets7,86615,002* Market Value14,19627,076* Revenue Growth0.71%5.92%* Dividend Payer61.17%78.19%* ROE-4.72%3.71%* Earnings Variation Leverage * Market Value Change5.68%1.45%* Slack / Liquidity13.38%11.26%

Page 8 Recording of this session via any media type is strictly prohibited. RVM VALUE FOR LOW AND HIGH FINANCIAL VARIABLE LEVELS RVM (Low)RVM (High) ERM Score Opaque Assets Tobin's q * Firm Assets Market Value * Revenue Growth * Dividend Payer * ROE * Earnings Variation * Leverage Market Value Change * Slack / Liquidity *

Page 9 Recording of this session via any media type is strictly prohibited. MULTIVARIATE REGRESSION ANALYSIS: ANALYZING THE RVM Coefficientp-value ERM Score * Opaque Assets * ERM*Opaque * Tobin's q * Firm Assets Revenue Growth Dividend Payer ROE Earnings Variation Leverage Market Value Change Slack / Liquidity R2R F-Stat3.57<0.001*

Page 10 Recording of this session via any media type is strictly prohibited. Questions, Final Comments and Contact Information Dr. Paul L. Walker Schiro/Zurich Chair of ERM Executive Director, Center for Excellence in ERM St. John’s University (212) Dr. David Pooser Assistant Professor St. John’s University (212)